Lei Jun's High-Quality Cost Leadership Strategy

Who Does Xiaomi Learn From

• Tongrentang: Aiming for a century-old enterprise, Tongrentang is the best example. Its characteristic is high product quality, even though the prices are not cheap.
• Walmart & Costco: Innovation in business models, lowering prices, with most products priced at less than half of similar existing products. A research and development system that hires a small number of the best talents, where one person is worth fifty. Eliminating traditional marketing and channel costs: removing market expenses from marketing, focusing solely on word-of-mouth marketing. Simplifying sales channels, focusing only on direct sales. Although the prices are low, the sales volume is extremely high.
• Haidilao: What is word-of-mouth? Exceeding user expectations.

A business model of high quality, low price, and optimized efficiency can only be executed by those who have made money and are not short on cash. Affordable, high-quality smartphones are merely a means to acquire customers, drawing users into mobile internet platforms and e-commerce platforms (+ smart hardware).

Internet Thinking = Seven-Character Formula (Focus on Extreme Word-of-Mouth Fast) + Sense of Participation (Mass Line)

• Focus on Extreme: Centering on smartphones, TVs, and routers, doing it oneself, serving as the entry point for the ecosystem, while other companies handle other products within the ecosystem.
• Word-of-Mouth? Exceeding user expectations, even bringing the product into a friendship. This is the core of internet thinking.

De-Management

Pursuing super flat structures, where leaders understand all the details, enabling quick responses and decisions. Pursuing super flat structures, where leaders understand all the details, enabling quick responses and decisions.

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Prerequisites

• Platform-level products, making the platform affordable, allowing monetization through applications at the platform level.
• Having top-tier talent and capital during the bootstrap phase.
• Achieving likability in branding.